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Libertarians have a reputation of being insensitive to the needs of the poor. Some make charges of selfishness or heartlessness on their part. To a large extent, I think libertarians have only themselves to blame. Many have been too quick to rush to the defense of big business, not seeing how the exploitation of the working class is largely fueled by state intervention. Many libertarians do not see the full implications of a true free market, and the benefits it would have for the working class.

To understand its implications, we might do well to look beyond libertarian theorists like Rothbard or Von Mises and look instead to the free-market anarchists, particularly Benjamin Tucker. Tucker saw the working class as being subjugated by four state-maintained monopolies: the money monopoly, the land monopoly, tariffs, and patents.

As I have discussed the land monopoly extensively in my past threads, I will focus here on the money monopoly. By money, what Tucker was referring to was banking, and the state chartering of banks. To become a chartered bank, one must meet numerous conditions including convincing the government that there is a reason to have another bank. This insures that the ability to issue capital loans remains in the hands of the few, keeping interest rates relatively high. As Tucker pointed out, the banker "invests little or no capital of his own, and therefore, lends none to his customers, since the security which they furnish him constitutes the capital upon which he operates...." In a truly free market, any group of people could form a cooperative bank and issue mutual bank notes against any form of collateral they see fit. The new competition in banking could drive interest rates almost to zero. Banking loans would essentially become little more than rendering liquid the assets of the borrower. This would allow the working class to free up their property for moblization in the form of capital. The new abundance of cheap credit would drastically improve the bargaining power of the working class. This might even have certain libertarian socialist implications, as workers could now control the means of production. For those who remained wage workers, the alternatives available to them would mean that their employers would have to raise their wages to remain competitive.

And let us not forget corporations, the entities which the left loves to hate. As has been discussed before, these companies are legal fictions created by charters which grant them limited liability, which allows those who run it to shift the burden of lawsuits and legislation onto the stockholders and workers.

In response to the rise of corporations, progressive liberalism arose, promising to regulate the power of these large businesses and provide a social safety net for those "left behind" by the "excesses" of the free market. The large body of regulations they passed only helped to further expand the power of these corporations by limiting the ability of small businesses to compete.

We must remember that Adam Smith himself was a champion of the little guy. He did not write The Wealth of Nations with the interests of big business in mind. He, along with David Ricardo and James Mill, intended to liberate the merchants and artisans from the tyranny of feudal landlords and chartered monopolists. It was after state capitalism became mainstream that free market advocates became apologists rather than revolutionaries. It was in this political climate that marginalism and Austrian economics arose in reaction to socialism, which was becoming more popular among intellectuals. But the reactionary sentiment was not uniform. Thomas Hodgskin's criticism of industrial capitalists was quite reminiscent of Smith's attacks on feudal landlords and mercantilists, on the same principles. Henry George and Albert Jay Nock appealed to the classic liberal tradition in a radically populist manner. Individualist anarchists such as Proudhoun and Tucker used free markets as a weapon against state-enforced capitalistic privileges, during a time when so-called "laissez-faire" prevailed. Modern libertarians would do well to learn from these people. A free market is the working man's friend. And so I say "Workers of the world unite!'" Not to abolish the free market, but to demand it.

Well, what libertarians should do is adopt the policy of taxing citizens somewhat, and then redistribute that money into programs that help the public and the poor, like social assistance, health care etc. That way everybody wins and we live in a more happy world for everyone

--------------------Don't fight it. Just let the illuminados take over your mind. You be at bliss soon.

Quote:Unagipie said:Well, what libertarians should do is adopt the policy of taxing citizens somewhat, and then redistribute that money into programs that help the public and the poor, like social assistance, health care etc. That way everybody wins and we live in a more happy world for everyone

"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

--------------------It is better to be hated for what you are than to be loved for what you are not. -Andre Gide

"Generosity is nothing else than a craze to possess. All which I abandon, all which I give, I enjoy in a higher manner through the fact that I give it away. To give is to enjoy possessively the object which one gives."

Quote:cb9fl said:"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

It is standard practice to name the originator of a quote being given, but I'll take a guess...Thomas Jefferson?

Deregulated banks aren't always a beautiful thing. We used to have runs on banks. The used to be unregulated. People would deposit money and it would be lost on speculative ventures. Then they would get hit by a run and the common depositors would lose everything.

During the time of banking panics, the money supply would constrict severely and this would have detrimental effects on the economy. During the great depression of the late twenties and thirties, the supply of money contracted over 30%. Ever since World War 1, the United States currency had become the definitive world currency, taking the honors from the British Pound. New York had replaced London as the capital of international finance.

Thus, when our economy collapsed, we exported that collapse all over the world. The great depression started in America, which was by then the world's largest economy and dominant creditor. We then gave the bug to everyone else.

Had the Federal Reserve actually taken measures to expand the supply of money and hold up the banks (which is what they were chartered to do, end banking panics), the Great Depression would have been much less of an event than it actually was. It could have largely been avoided.

Getting rid of government regulation of banks doesn't mean that banks will become smaller and more competitive. One of the main reasons that we have government regulation of banks is because banks were becoming bigger (sometimes with bigger capitalization than foreign governments), and that bigger banks had an anticompetitive aspect on the economy.

J.P. Morgan was a quintessential American Mega bank in the 1800's. It thrived in an era of no government regulation. JP Morgan consolidated the railroad industry and formed a monopoly. They consolidated the Steel industry and formed a monopoly. They consolidated the shipping industry in an effort to form a monopoly. The used their undue influence to manipulate the stock market on Wall Street for their own gain, and then they would buy up companies when the market bottomed from their own meddling.

If you think that getting rid of banking regulations is the answer I think you might be wrong. Personally I think our problems are related to the massive debt load that the Federal, State and local governments have accumulated. And that has less to do with banking than with spending more than you can afford to.

I don't understand how you can start your comments against free banking and then cite the GREAT Depression in defense. The Great Depression (I wonder why it's called 'Great') started AFTER the Fed was created and started messing with the money supply. Why were depressions before that one shorter lasting and less severe? Should the federal reserve have taken action to EXPAND the money supply? Look at some pictures from Germany during the depression, see those wheelbarrows full of money? That's from expanding the money supply.

Regarding the massive debt load, that is tied in with the federal reserve system. The fed buys debt from the treasury, turns around and expands the money supply in an amount that is a product of a multiplier and the greater amount of debt it now holds as an 'asset.' This is monetary inflation, and drives up the dollar denominated cost of things as it lowers the value of all dollars in circulation.

--------------------Money doesn't grow on trees, but deficits do grow under Bushes.

You can accept, reject, or examine and test any new idea that comes to you. The wise man chooses the third way.- Tom Willhite

Disclaimer: I reserve the right to change my opinions should I become aware of additional facts, the falsification of information or different perspectives. Articles written by others which I post may not necessarily reflect my opinions in part or in whole, my opinions may be in direct opposition, the topic may be one on which I have yet to formulate an opinion or have doubts about, an article may be posted solely with the intent to stimulate discussion or contemplation.

Quote:Prosgeopax said:I don't understand how you can start your comments against free banking and then cite the GREAT Depression in defense. The Great Depression (I wonder why it's called 'Great') started AFTER the Fed was created and started messing with the money supply. Why were depressions before that one shorter lasting and less severe? Should the federal reserve have taken action to EXPAND the money supply? Look at some pictures from Germany during the depression, see those wheelbarrows full of money? That's from expanding the money supply.

I have come to the conclusion that expanding the money supply is not necessarily a bad thing, if done strategically. What we need to do is to peg the money supply to population growth, so that the per capita money supply remains constant, and we experience neither inflation(like we currently experience) nor deflation(like we had under the gold standard).

Quote:Paradigm said:I have come to the conclusion that expanding the money supply is not necessarily a bad thing, if done strategically.

Whoever is in control of expanding the money supply is in control of taking wealth by inflating the money supply. The economic effects are the same whether perpetrated by expert counterfeiters, treasury departments or central bankers.

Quote:What we need to do is to peg the money supply to population growth, so that the per capita money supply remains constant, and we experience neither inflation(like we currently experience) nor deflation(like we had under the gold standard).

When referring to deflation, you of course mean price drops with a constant money supply as opposed to deflation of the money supply in order to manipulate economic activity (hence the reference to the gold standard). Even on a gold standard, the supply of the monetary base (gold) will continue to expand. But it's just much harder to bring about, requiring more effort than running a printing press or entering extra zeroes on a ledger sheet. This of course makes it much harder for the political class and the banksters to skim wealth out of everyone else's pockets. But what's wrong with price deflation if it occurs as a natural consequence of increased wealth in a society or more efficient manufacturing? Are lower prices due to increased supply a bad thing?

--------------------Money doesn't grow on trees, but deficits do grow under Bushes.

You can accept, reject, or examine and test any new idea that comes to you. The wise man chooses the third way.- Tom Willhite

Disclaimer: I reserve the right to change my opinions should I become aware of additional facts, the falsification of information or different perspectives. Articles written by others which I post may not necessarily reflect my opinions in part or in whole, my opinions may be in direct opposition, the topic may be one on which I have yet to formulate an opinion or have doubts about, an article may be posted solely with the intent to stimulate discussion or contemplation.